India Sets Record with 73 GW Utility-Scale RE Tenders in 2024, but Challenges Persist

India’s renewable energy sector set a new record in 2024 by issuing tenders for 73 GW of utility-scale renewable energy projects, surpassing the previous year’s total of 58 GW.

This was revealed in a report titled 'Challenges in India’s Tender-Driven Renewable Energy Market' by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

According to the report, this marks the second consecutive year that the country has exceeded its annual tender issuance target of 50 GW, reflecting its strong commitment to clean energy expansion. 

A key trend shaping the renewable energy tendering landscape in 2024 is the shift toward advanced renewable technologies. Nearly half of the tenders issued this year focused on non-vanilla technologies, such as, wind-solar hybrid projects and battery energy storage systems (BESS), signalling a growing market demand for improved power quality and reliability.

The report highlights that India’s renewable energy sector has matured significantly, with stakeholders actively working to address structural inefficiencies. According to Vibhuti Garg, Director, South Asia at IEEFA, “The evolution of renewable energy tenders demonstrates that market stakeholders are actively working to overcome shortcomings."

“The renewable energy market has matured considerably, and all stakeholders, from investors to energy offtakers, have built a strong understanding of the intricacies of renewable energy technologies,” she adds. 

However, despite the surge in tendering, post-bidding challenges such as undersubscription, delays in power sale agreements (PSAs), and tender cancellations are threatening project execution.

Tender undersubscription has emerged as a major issue, as Prabhakar Sharma, Senior Consultant, JMK Research, notes, “Tender undersubscription is emerging as a challenge for tendering authorities. Last year, about 8.5 GW of utility-scale renewable energy tenders went undersubscribed, five times more than in 2023, owing to complex tender designs, aggressive bidding during reverse auctions and delays in the readiness of the interstate transmission system (ISTS) infrastructure."

Additionally, more than 40 GW of signed PSAs remain pending, with tenders led by the Solar Energy Corporation of India (SECI) accounting for 30 percent (12 GW) of the backlog. Developers argue that the mandated 50 GW annual bidding target pressures implementing agencies to issue tenders without first securing offtake agreements, leading to further delays in PSA signings.

Between 2020 and 2024, a total of 38.3 GW of utility-scale renewable energy projects, which is about 19 percent of the total issued capacity, were cancelled due to tender design flaws, location constraints, and failure to secure PSAs. Industry experts warn that continued delays in project execution could dampen investor confidence and slow down India’s progress toward its 2030 renewable energy goals. 

“Delays in project implementation pose a significant challenge to India’s renewable energy target for 2030,” says Ashita Srivastava, Senior Research Associate, JMK Research. 

To ensure the smooth execution of tenders, experts recommend that authorities streamline the entire process from bid issuance to final PSA execution. As Deepalika Mehra, Research Associate at JMK Research, puts it, “In addition to issuing tenders, the government should establish annual targets for both allotments and the execution of PSAs. This will ensure that renewable energy implementing agencies (REIAs) issue bids only after securing the necessary offtake agreements.” 

India’s ambitious target of reaching 500 GW of renewable energy capacity by 2030 makes it imperative to address these challenges. The surge in tendering has undoubtedly positioned India as a leader in clean energy deployment, but unresolved execution bottlenecks could slow down progress.

As the sector evolves, market participants and policymakers must work collaboratively to enhance tender design, improve the PSA process, and ensure the timely completion of renewable energy projects.